But now we face a real crisis. Last week the Revenue Estimator Conference met and agreed that we're going to be short around $233 million from what was estimated last May. We're also spending more, for nursing home care, RIte Care, DCYF and other services. The Governor's office says the overspending plus the shortfall totals $372 million, though I expect that number to change.

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IT ISN'T VERY OFTEN that one of life's maxims can be applied to state tax policy. Many hands make for . . . a lot of exemptions? A penny saved is a penny . . . deducted? Yet, judging from how officials in Rhode Island have sought to mimic Massachusetts in recent years, it is no great stretch to say that the grass always seems greener on the other side of the tax-policy fence.

In the mid-1990s, Massachusetts adopted two costly and regressive tax breaks: a reduction in the tax rate for capital gains and a modification to its corporate income tax designed to benefit such large and profitable companies as Raytheon and Fidelity. Over the past few years, Rhode Island has followed suit, lowering its tax rate for capital gains by two-thirds and offering millions in tax inducements to lure Fidelity to Smithfield. More recently, the prospect of Massachusetts ending its personal income tax via this fall's ballot has dominated airwaves and front pages around the region.

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The bleak news probably sets the stage for rounds of painful budget cuts likely to affect everyone who pays property taxes, enjoys state beaches, depends on subsidized health insurance or works for the state. Adding to the dismal financial forecast, the House fiscal office also projected a deficit of "about $450 million" for the budget year that begins next July, although that figure may change substantially in the coming days.

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The first concerns the state bond sale of a couple of weeks ago. This was when Treasurer Frank Caprio arranged to sell bonds to the public. Here's what happened.

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PROVIDENCE - About 22 people outside the State House yesterday wielded signs opposed to repealing the state income tax and chanted "Fair is fair!" and "Enough is enough!"

"Governor: No more shifting taxes onto our backs!" read the large black type on one of the white signs.

Ocean State Action, an economic- and social-justice coalition of about 19 groups, organized the rally after Governor Carcieri said in an interview with WPRO radio talk show host John DePetro on Tuesday that he'd rather tax "consumption" than income. Carcieri said he would "love to find a way" to eliminate the state income tax.

If you could shape U.S. health care reforms in the coming years - and help ensure they happen - what would be your priorities? Is universal coverage a must for you, and if so, at what cost? How about lowering premiums? Do you want to minimize people's out-of-pocket spending?

PROVIDENCE — A comprehensive overhaul of the state tax system that advocates say would reduce the overall tax burden of 90 percent of Rhode Islanders while adding more than $140 million in revenue to reduce the deficit was unveiled Tuesday at the Statehouse.

PROVIDENCE — Two Rhode Island legislators said yesterday that they will introduce legislation that would make sweeping changes to the state's tax structure by raising taxes for the wealthiest Rhode Islanders in order to give property tax relief to middle- and low-income residents.

PAWTUCKET — Racism and xenophobia are contributing to a Rhode Island social climate in which immigrants are regarded as the villains, speakers at a pro-immigration rally said yesterday.

A newly released poll commissioned by Ocean State Action, an advocacy group with a special interest in health care, shows a strong sense among Rhode Island voters that some kind of government-initiated reform is in order – but what that should be is less clear.